This old deal needs a new plan

Published 12:00 am, Friday, January 28, 2011

Have you ever solved a knock in your car engine by turning up the volume on your radio? That's pretty much how Congress has been treating Social Security as it chugs along toward insolvency.

The more evident the problem grows, the more lawmakers seem to think arguing will make it go away.

That strategy isn't working.

The latest warning comes from the nonpartisan Congressional Budget Office, which found that Social Security's trust fund will be drained even sooner than expected. Where previous estimates put its demise around 2040 or later, the CBO now says it will be gone by 2037. At that point, Social Security won't have enough money to pay the full benefits it owes.

This isn't some economic theory. Social Security is already paying out more to its roughly 53 million recipients than it takes in through payroll taxes, forcing it to tap the fund. The government has also borrowed from the fund.

It's not for want of solutions. It's for want of political will.

More Information

The issue:

Social Security's prognosis just got worse.

The Stakes:

The longer this goes unresolved, the worse the crisis will be when it comes.

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What Congress first needs to do is agree that Social Security is here to stay, notwithstanding the rants of those who call it creeping socialism or the greed of a financial system that would love to see all those trillions invested in the stock market.

Once that's settled -- and really, after more than 75 years, it should be -- there are plenty of ideas on ways to extend the fund's life far into the future. A draft from The President's National Commission on Fiscal Responsibility and Reform, which has been looking at federal spending and deficits, pulled a number of these ideas together. Its co-chairs suggested gradually raising the cap on the income on which Social Security contributions are based (now $106,800). They also proposed slowly increasing the full retirement age, reflecting our increasing longevity. Even then, the age would reach only 68 around 2050 and 69 around 2075.

Their plan also called for early retirement exemptions for hardship and jobs involving physical labor. It suggested a more progressive formula to give higher checks to people with lower incomes. It talked about better education on retirement planning.

Whether or not that's the right approach for Social Security is for Congress to figure out. But it's important to note that taking action now would give the nation years to gradually put Social Security on a sound heading, and allow future retirees to plan accordingly.

Or America can turn up the radio and hope the car fixes itself. Yeah, that'll work.